- Mattr Corp. (TSX:MATR) has entered into an agreement to sell its subsidiary Thermotite do Brazil to Vallourec for US$17.5 million
- Vallourec will acquire 100 per cent of the shares of the Termotite entity while Matter will control and retain all earnings from Thermotite until the closing of the transaction
- The deal is part of the company’s strategy in simplifying its portfolio as it seeks to reduce volatility and increase full-cycle margins
- Shares of Mattr are up 2.16 per cent to C$14.19 as of 12:48 pm ET
Mattr Corp. (TSX:MATR) has entered into an agreement to sell its subsidiary Thermotite do Brazil to Vallourec Tubular Solutions for US$17.5 million.
The Toronto-based company stated that Vallourec Tubular Solutions, which is a subsidiary of Vallourec S.A., will acquire 100 per cent of the shares of the Termotite entity while Matter will control and retain all earnings from Thermotite until the closing of the transaction.
“Aligned with the company’s actions over the last three years to simplify our portfolio, lower volatility and increase full-cycle margins, this announcement – and the proceeds ultimately expected from this transaction – further enhances Mattr’s ability to deliver focused, high-return growth in our remaining core businesses,” Mike Reeves, CEO of Mattr, said in a statement.
Although it is expected the transaction will still take several months before it is completed, Mattr expects it to be completed within the standard review time.
Mattr Corp.’s Q2 2024 financials
The company’s announcement comes a month after the release of its Q2 2024 financial results in which it highlighted first production from its new, state-of-the-art Composite Technologies manufacturing sites in Rockwall, Texas, and Blythewood, South Carolina.
“The company remains on-time and on-budget in its deployment of organic growth capital to establish all four of its new North American production facilities,” Mattr stated in a news release.
Other highlights from its results include:
- Consolidated revenue of C$254 million, operating income from continuing operations was $29 million;
- Composite Technologies segment revenue was $153 million, a slight increase from the $150 million from the previous year’s quarter and a new quarterly record;
- Connection Technologies segment revenue was $89 million
- Net income of $2.1 million on a consolidated basis
“Our belief is unchanged that full year 2024 revenue will be higher than that of continued operations in 2023, with underlying profitability now likely to be similar to last year,” Reeves said in a statement.
Moving forward into the final months of the year and beyond, Mattr expects to expand and optimize capacity in targeted geographies and improve efficiency within its North American production network.
Notably, the company is one of the largest pipe-coating businesses in the world. Pipe coating is a cost effective solution in maintaining a pipeline.
Growth of pipe coating market
The overarching pipe coating market is projected to reach a valuation of US$14.5 billion by 2023, up from $9.8 billion in 2024 and growing at a compound annual growth rate of 5 per cent during the forecast period.
Contributing to that increase is growing infrastructure and industrialization as well as strides made in irrigation and agricultural activities.
According to Market Research Future, pipe coating includes fusion bonded epoxy, metallic coatings, concrete coatings and thermoplastic polymer coatings.
About Mattr Corp.
Mattr Corp. is a global materials technology company serving critical infrastructure markets, including transportation, communication, water management, energy and electrification.
The company operates under two key business segments, Composite Technologies and Connection Technologies.
Shares of Mattr Corp. (TSX:MATR) are up 2.16 per cent to C$14.19 as of 12:48 p.m. ET.
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